Through Intel, Venture Firms Send Message To Washington

By

Tomio Geron

Feb 23, 2010 4:56 pm ET

Intel Corp.’s announcement of a new $3.5 billion venture alliance to invest in U.S. start-ups puts a nice face on the chip giant and the venture industry. It conjures up an impressive vision of an industry coming together and committing to a major new initiative.

Except for one thing – it’s not new money. The 24 venture firms that have signed on have not raised new capital, and they’re not pooling their capital into a new fund. While $3.5 billion is a nice big, round number, it simply represents the total amount that this small but prominent slice of the venture industry already planned to invest in U.S. companies.

In fact, there’s nothing forcing the venture firms to invest that amount during this two-year period. They’re simply giving their word.

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